Africa Largest Chinese Aid Recipient

Africa was the largest recipient of overseas Chinese development finance between 2000 and 2014, says a study by the Centre for Strategic and International Studies in Washington DC. 

The report calculated that China provided a total of $354 billion in loans, grants and other assistance to countries around the world. Just over a third of this was provided to Africa. China gave $ 121.6 billion for 2,390 projects, with 60 per cent of these being in the transport and energy sectors. In comparison, the United States provided $ 100 billion of aid to Africa during the same period but 80 per cent of it was dedicated to healthcare and humanitarian assistance.

The report noted that 75 per cent of Chinese development finance worldwide did not meet the strict official development assistance (ODA) standards set by the Organization for Economic Co-operation and Development (OECD). As a consequence, China’s development finance is categorized as other official funds (OOF) in which the terms are typically more onerous than ODA and “is not necessarily designed to promote the economic development and welfare of recipient countries.” Most Western countries subscribe to the OECD’s standards.  

Eastern Africa was the largest recipient of Chinese development finance, netting 38.2 per cent of the total allotted to Africa. Central Africa received a quarter of the finance and North Africa just over a fifth. 

The report noted that the composition of this assistance “reveals Beijing’s twin goals of connecting African markets with the Chinese economy and enhancing its access to natural resources.” In Ethiopia, the second largest African recipient of Chinese developmental financing, about half of the funding was used for transportation projects reflecting the country’s strategic location in the Horn of Africa. In Angola, however, 40 per cent of the funding was used to exploit the country’s large oil resources. Other analyses have shown correlations between Chinese development finance and the foreign policies of the recipients. 

AidData looked at how closely aid recipients, especially in Africa, voted in favour of China in the United Nations. They found a 10 per cent increase in voting convergence went with an 86 per cent ODA increase. Interestingly, OOF funding did not exhibit such a correlation, probably indicating other goals went with such forms of funding. 

https://chinapower.csis.org/china-development-finance/

 

December 29, 2018

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About the Author

Pramit Pal Chaudhuri writes on political, security, and economic issues. He previously wrote for the Statesman and the Telegraph in Calcutta. He served on the National Security Advisory Board of the Indian government from 2011-2015. Among other affiliations, he is a member of the Asia Society Global Council, the Aspen Institute Italia, the International Institute of Strategic Studies, and the Mont Pelerin Society. Pramit is also a senior associate of Rhodium Group, New York City, advisor to the Bower Group Asia in India, a member of the Council on Emerging Markets, Washington, DC, and a delegate for the Confederation of Indian Industry-Aspen Strategy Group Indo-U.S. Strategic Dialogue and the Ananta Aspen Strategic Dialogues with Japan, China and Israel. Born in 1964, he has visited over fifty countries on five continents. Mr. Pal Chaudhuri is a history graduate from Cornell University.